**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**


**Form
      10-KSB**


x Annual
      report under section 13 or 15(d) of the Securities Exchange Act of 1934 for
      the
      fiscal year ended December 31, 2003





Commission
      file number 000-304799





**eTELCHARGE.COM,
      INC.**


(Name
      of
      small business issuer in its charter)





**NEVADA**
            **75-2847699**(State
                or other jurisdiction
            (I.R.S.
                Employer incorporationof
                Identification No.)
            or
                organization)




**eTELCHARGE.COM,
      INC.**


**1636
      N. HAMPTON, SUITE 270, DESOTO, TEXAS 75115**


**(972)
      298-3800**


(Address
      and telephone number of principal executive offices)





Securities
      registered under Section 12(b) of the Exchange Act:


**NONE**




Securities
      registered under Section 12(g) of the Exchange Act:





**Common
      Stock, $0.003 Par Value**


(Title
      of
      each class)





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or for such shorter period
      that the registrant was required to file such reports), and (2) has been subject
      to such filing requirements for the past 90 days. Yes o ; No x





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of registrant's knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or any
      amendment to this Form 10-KSB. o





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes o ; No x





State
      issuer's revenues for its most recent fiscal year.


NONE





State
      the
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates computed by reference to the price at which the common equity
      was
      sold, or the average bid and asked price of such common equity, as of a
      specified date within the past 60 days. (See definition of affiliate in Rule
      12b-2 of the Exchange Act.)


Note:
      If
      determining whether a person is an affiliate will involve an unreasonable effort
      and expense, the issuer may calculate the aggregate market value of the common
      equity held by non-affiliates on the basis of reasonable assumptions, if the
      assumptions are stated. $6,827,558 as of February 24, 2006.





State
      the
      number of shares outstanding of each of the issuer's classes of common equity,
      as of the latest practicable date.


As
      of
      February 24, 2006, there were 129,733,600 outstanding shares.





Transitional
      Small Business Disclosure Format (Check one): Yes o ;
      No x


-1-


**PART
      I.**


**Item
      1.**  **Description of Business.**





HISTORY





eTELCHARGE.com, Inc. (the "Company"), was incorporated under the laws of the
      State of Nevada on June 7, 1999. Its offices are located at 1636 N. Hampton
      Road, Suite 270 DeSoto, Texas 75115. The Company has an Internet web site,
      www.etelcharge.com and its stock symbol is : ETLC.





THE
      BUSINESS





BACKGROUND




We were organized in June 1999 to provide customers of online merchants with
      the
      ability to charge their Internet purchases to their local telephone bill, rather
      than to a credit card. In May of 2003, the company expanded its service by
      offering credit card processing for merchants and becoming a merchant service
      company. This move positioned the company to provide the traditional payment
      options such as Visa, MasterCard and American Express for merchants and for
      merchants' clients to be able to accept those options along with our telephone
      billing option. While generally, our expected users do not have a credit card
      or
      are reluctant to use a credit card online due to security and privacy concerns,
      this additional service would allow the company to provide the traditional
      forms
      of payments and serve as a more complete solution for merchants accepting other
      non cash forms of payment.





The
      testing of our initial version of the telephone billing option enabled
      eTelcharge to bill transactions through a 900 number billing arrangement with
      AT&T. Our billing arrangement with AT&T was available to customers
      throughout the United States, except those western states for which Qwest
      provided the local service because Qwest did not at the time provide local
      billing services for any 900 numbers.





Internet
      merchants that offered our telephone billing option included our brand icon
      with
      the icons of credit card companies on the check out or pay page of their Web
      site. Customers who choose to charge their purchase to their telephone bill
      simply clicked on our icon and the billing information was communicated through
      AT&T to the local telephone service provider, using AT&T's 900 billing
      system. The charge then appeared on the customer's next monthly telephone bill
      on a separate page of the bill, with AT&T's logo on the page.





Although
      two other companies use similar 900 billing arrangements to allow customers
      to
      charge purchases to their telephone bills, these charges are limited to the
      purchase of services and some online software products. To our knowledge, no
      other company offers customers the opportunity to charge other goods and
      merchandise to their telephone bills.





-2-


We
      are in the development stage and have not generated any material revenue. We
      began our service online in August 2000 and launched our initial telephone
      billing option with 19 Internet merchants to offer our local telephone billing
      service to their customers. We entered into these agreements commencing in
      the
      second quarter of 2001. No single merchant agreement is material to our ongoing
      business operations. We charged these merchants a fee for each transaction
      ranging from 5% to 8% of the customer purchase which is approximately the same
      fee AT&T charges us for providing to us its 900 billing arrangement. In
      addition, we charge the customer a fee of 10% of the product or service purchase
      price. We did not earn any revenue from our merchants until October 2001 because
      it took us until that time to complete the integration of our system with that
      of our online merchants.





Commencing
      in January 2003, AT&T will no longer communicate the 900 charge to the local
      phone companies nor will the local monthly bill include AT&T's logo on the
      900 billing page. Consequently, we have selected Billing Concepts, Inc., one
      of
      the largest independent third-party billing services, to handle the billing
      transaction. While AT&T will no longer provide 900 billing in the telephony
      industry AT&T has assisted in the careful transitioning of eTelcharge's
      account to Billing Concepts Inc. Furthermore, this change in third-party billing
      services should not in any way affect transaction procedures of the customer
      and
      merchant, as Billing Concepts, Inc. charges similar fees as AT&T. AT&T
      continued to provide 900 transport of our lines insuring premier AT&T
      connection with the "Thank you for using AT&T," message linked to our lines
      until December 31, 2003.





Nonetheless,
      the change to Billing Concepts will impact the payment schedule to future
      merchants and participation of the Local Phone company's, While it has added
      the
      addition of Qwest to our coverage territory we will be unable to launch the
      new
      1.1 version with the following three Local Phone companies: SBC, Sprint and
      Citizens. Currently, the billing company has reported approval from the
      following Local Phone companies: Qwest, Verizon, CBT, BellSouth, Alltel, NECA
      and Verisign.




CURRENT
      OPERATIONS




As
      we are
      in the development stage, the initial telephone billing payment option will
      be
      retired for software improvement and further enhancements based on customer
      input; such enhancements shall focus primarily on speed of transaction and
      confirmation of charge approved to merchant. Once all improvements have been
      integrated and successfully tested the new 1.1 version of the initial telephone
      payment option will be launched.





Our
      rights to offer AT&T's 900 billing service online were assigned to us by
      Consumer Data Solutions Corp., which originally entered into a 900 number
      billing agreement with AT&T in March 1994. CDS has assigned to us its rights
      under the AT&T agreement until November 2098. We pay a license fee to CDS
      equal to 3% of the gross fees we receive from online telephone billing charge
      transactions. CDS is majority owned and controlled by Carl O. Sherman, our
      Chief
      Executive Officer and a director. Mr. Sherman founded CDS in 1993 to provide
      a
      900 billing service for pizza and other food delivery businesses. The service
      allows customers to bill their food deliveries directly to their telephone
      bill.
      Mr. Sherman continues to act as the Chief Executive Officer of CDS, although
      he
      spends less than 10% of his time on its operations. CDS does not compete with
      us
      as we have the exclusive right to use the 900 billing service for online sales
      transactions, including online food delivery services. We do not believe any
      conflicts of interest could develop between CDS and us for these
      reasons.





According
      to a March 30, 2001 Wall Street Journal article, more than 70 million adult
      Americans do not have credit cards. Moreover, a majority of credit card holders
      who decline to charge online do so out of security or privacy concerns.
      Initially, we have targeted Internet merchants who offer CDs, video cassette
      tapes, computer software, books, flowers and food items to offer our telephone
      billing option. Following an online purchase by a customer, the charge is
      included on behalf of the merchant in the customer's next telephone bill. With
      AT&T Approximately 30 days after an online charge, we receive an advance
      against the purchase price prior to the customer paying the telephone bill.
      After deducting our fees, we forward payment directly to our online merchant.
      If
      the charge is not paid by the customer for any reason, including a default
      or
      refusal to pay due to a dispute, the telephone company will charge back its
      advance to us. In this event, our merchant and we will not receive the purchase
      price for the goods or services. Under our agreement with Billing Concepts
      Inc.,
      Billing Concepts will advance seventy percent (70%) of the amount determined
      on
      the first Tuesday after the sixtieth (60th) day from the date Billing Concepts
      receives billing records from eTelcharge.com; fifty percent (50%) of the
      remaining balance of the amount determined on the first Tuesday after the
      ninetieth (90th) day from the date Billing Concepts receives billing records
      from eTelcharge.com; and the remaining balance of the amounts so determined
      on
      the first Tuesday after one hundred twentieth (120th) day from the date Billing
      Concepts receives eTelcharge.com records. All payments to eTelcharge.com are
      subject to deductions from all assigned and allocated assessments and taxes
      charged to the Local Phone Companies.





-3-


We
      intend
      to establish a reserve of 3% of fees due to us from merchants to cover defaults,
      refusals to pay, disputes and other charge backs due to customer nonpayment.
      We
      will evaluate this reserve on an ongoing basis to reflect our
      experience.





The
      privacy and security of our billing service could be breached by third parties
      seeking confidential account information such as passwords and financial account
      information. Such a breach could subject us to liability from customers and
      merchants and could harm our reputation, thereby inhibiting the use of our
      billing service. However, since the customer only provides a telephone number,
      and not charge card information, and since the maximum amount we allow any
      customer to charge in any month is only $60, we do not believe it likely that
      third parties will seek to access this information. In order to make any breach
      of our system more difficult, our system only approves charges that originate
      from the customer's home computer and verifies the charge through a telephone
      call that must be generated from the customer's telephone number.





STRATEGY





Our
      objective is to integrate our new on line telephone billing option by
      offering it with established traditional credit card payment
      options. We will contact online and offline merchants by offering
      their customers a new billing option which is safe, secure and confidential
      and
      which has been previously unavailable to customers who do not have credit cards.
      In order to achieve our objective we intend to:




·
            Improve
                our telephone billing software with technical enhancements to speed
                up the
                payment confirmation and approval timeframe prior to launching the
                next
                version of the telephone billing payment
                option;




·
            Seek
                to establish a faster payout schedule for merchants who accept the
                1.1
                version for initiating online charges to telephone
                bills;




·
            Continue
                to stress the security and privacy advantages of our telephone billing
                service;




·
            Provide
                responsive customer service to our online merchants through use of
                an
                employee assigned to each merchant.




Although
      AT&T terminated its billing services for all 900 number merchants in January
      2003, requiring us to select another billing service provider, this transition
      was made easier due to AT&T's involvement in transitioning the account to
      Billing Concepts Inc.





MARKETING





Using
      our marketing staff, including our President, we market to online merchants
      through direct presentations. We attract online merchants through direct sales
      calls, referrals from Web design firms, advertisements in trade journals, media
      reports about our company and word of mouth.





In
      the future, we intend to use mass e-mail communications to inform Internet
      users
      of our charge payment option and in order to encourage customers to request
      that
      our payment option be included on the merchant Web sites on which the customer
      shops. We also intend to use banner and other online advertisements to market
      to
      online virtual shopping mall providers in order to reach online merchants.
      We
      will also utilize the assistance of outside marketing and sales organizations,
      increase our advertising in print and Internet-based trade publications
      subscribed to by online merchants and may also use television commercials to
      inform merchants and customers that purchases can be charged to the customers'
      telephone bill.





-4-


Our
      marketing efforts stress the simplicity and privacy of using a telephone number
      and password for online charges rather than using a credit card. We also stress
      to our online merchants the substantial number of individuals who do not have
      credit cards. Finally, we include in our sales presentations our commitment
      to
      donate $.05 per billing transaction from the telephone billing option up to
      a
      maximum of $250,000 per year to KIDCARE, a Houston-based charity benefiting
      underprivileged children. Our commitment to KIDCARE may be cancelled by us
      on
      six months notice.




COMPETITION


We
      expect
      to compete with the U.S.-based multinational credit card companies as a charge
      option to customers electing to charge on the merchant's Web site. In soliciting
      merchants, we are disadvantaged by the fact that we charge the merchant more
      than a credit card company would for the same transactions and we also charge
      the merchants' customers a separate charge fee. Payout schedule to merchants
      for
      transactions charged via the telephone billing option are also restricted to
      longer hold periods prior to payout to merchants. Additionally, customer charges
      are limited to no more than $60 per month. However, we will offer a new charge
      option to customers of our merchants who do not have credit cards or are
      reluctant to use credit cards online.





We
      also
      expect to compete with two other 900 billing services, eCharge and iBill, all
      of
      which are larger than we and offer customers similar opportunities to charge
      to
      their telephone bills online, through arrangements with 900 billing services.
      However, 900 billing charges through these companies are generally limited
      to
      services, rather than products, and to some digital goods offered for sale
      online. We believe we have a competitive advantage in that we will have
      developed a 900 number application that allows for the purchase of qualified
      goods offered by our online merchants. Moreover, we believe that our software
      is
      more customer friendly than our competitors' because our customer simply clicks
      on the eTELCHARGE icon and provides a password and e-mail address. iBill
      requires the customer to call a 900 number while online to obtain a special
      pin
      number to complete the transaction.





There
      can
      be no assurance that competitors will not develop software in the future that
      will allow them to include all merchant offered products and services for online
      charging. Moreover, many of our competitors are larger, better financed, have
      been in business longer and have significantly more working capital and more
      experienced personnel than we.





GOVERNMENT
      REGULATION





We
      are
      not directly regulated by any governmental agencies nor are we subject to
      statutes, rules or regulations which regulate the manner in which we do
      business. However, our online merchants are subject to numerous governmental
      regulations required of merchants in general such as truth in advertising
      requirements, product safety and the like. We do not believe that we would
      be
      held liable for violations by our merchants of any such government regulations
      or with respect to disputes between our merchants and online customers.
      Nevertheless, we may be named in such proceedings in which case we could be
      required to expend substantial fees in defending ourselves and could be liable
      for substantial money judgments.





EMPLOYEES





As
      of
      February 24, 2006, we have 5 full-time employees and 21 part-time
      employees.




**Item
      2. Description of Property.**





We
      currently lease 3,000 square feet of office space on a three-year lease expiring
      January 31, 2007 at 1636 N. Hampton Road, Suite 270, DeSoto, Texas
      75115.




-5-


**Item
      3. Legal Proceedings**





The
      Company is not a party to any pending legal proceedings.




**Item
      4. Submission of Matters to a Vote of Security Holders.**





The
      Company did not submit any matters to a vote of its stockholders during the
      2003
      fiscal year.




-6-


**PART
      II.**




**Item
      5. Market for Common Equity and Related Stockholder
      Matters.**




Our
      common shares trade on the over-the-counter Pink Sheets under the symbol
      ETLC.PK. Prior to May 2003, our common stock traded on the over the counter
      Bulletin Board under the symbol ETLC. We were notified in May 2003 that we
      no
      longer qualified for the Bulletin Board minimum listing requirements. The table
      below sets forth high and low closing prices for our common stock during each
      of
      the periods indicated, as reported the over-the-counter bulletin board or the
      Pink Sheets by NASDAQ. Such price quotations represent inter-dealer prices
      without retail markup, markdown or commission and may not necessarily represent
      actual transactions.




**2003****QUARTER
                ENDED**
            
            
            **LOW**
            
            **HIGH**March 31
            
            
            $
            1.75
            
            $
            1.75June 30
            
            
            0.51
            
            0.55September 30
            
            
            0.06
            
            0.08December 31
            
            
            0.02
            
            0.05




As
      of
      February 24, 2006, we had approximately 581 holders of record of voting common
      stock.




We
      have not paid dividends on our common stock and do not anticipate the payment
      of
      cash dividends in the foreseeable future, as we contemplate retaining all
      earnings to finance the continued growth of our business.




During
      fiscal year 2003 no stock was sold and/or issued for services.




**Item
      6. Management's Discussion and Analysis or Plan of
      Operation.**





The
      Company had a net loss of $2,271,341 for the year ended December 31, 2003,
      a
      increase of $1,040,722 compared to a net loss of $1,230,619 for the year ended
      December 31, 2002. The increased loss primarily resulted from non-cash charges
      associated with the issuance of common stock for services. The Company, as
      a
      development company, has generated no material operating revenues as of December
      31, 2003.





PLAN
      OF
      OPERATION


We
      were
      organized in June 1999 and are in the development stage. Investors should note
      that our auditor's report for the year ended December 31, 2003, included a
      paragraph which expressed substantial doubt as to our ability to continue as
      a
      going concern. We expect that our revenue will be generated from both online
      and
      offline merchants and customers.  We will maintain a billing fee of 5% to
      8% of the purchase price of the goods or services charged, not including taxes,
      and an approximately new transaction fee of $.50 per transaction service
      charge.  We plan to maintain the same fee of a ten percent (10%) service
      charge to be added to total charge added to phone bill utilizing our telephone
      billing option, while limiting purchases to sixty dollars ($60.) per
      month.  Our cost for phone billing are comprised of Billing Concepts 6% of
      billed revenue and Local Phone Company charges, which vary from $0.45 cents
      up
      to $1.65.  Billing Concepts will earn this fee for providing the bills that
      the local telephone companies will include in their monthly billing statements
      to their customers.  Commencing in January 2003, AT&T terminated
      providing this billing service in the industry, and we have contracted with
      a
      private third-party billing service, Billing Concepts, Inc., in place of
      AT&T. Additional revenue will be generated from our credit card merchant
      services.  We charge merchants a monthly fee ranging from $29. to $89. per
      month for leasing our credit card machines, a discount fee ranging from 1.69%
      to
      3% for credit card processing, a transaction fee of twenty five cents ($0.25),
      a
      statement fee ranging from $10 to $15 per month.





-7-


We
      intend
      to establish a reserve of 3% of fees due to us from merchants to cover defaults,
      refusals to pay, disputes and other charge backs due to customer nonpayment.
      This reserve is larger than that of our competitors, which averages
      approximately 2% of such fees according to these competitors. We have not made
      any independent assessment of the sufficiency of the reserve amount, because
      we
      have not yet generated on line billing transactions that create receivables
      due
      from merchants. Accordingly, although we believe our reserve will be adequate
      to
      over defaults and other charge backs, we cannot give any such assurance. We
      intend to evaluate this reserve on an ongoing basis to reflect our
      experience.





Although
      we have not generated revenue, we have tested our initial phone billing option
      with 19 Web merchants, all of which have been integrated into our billing
      system. Previously, it took a number of months to integrate our merchants,
      as
      they were required to write some of the computer code necessary to join our
      system. Recently, however, we began to provide the code ourselves which we
      believe will significantly shorten the time necessary for merchants to join
      our
      billing system. We expect, but cannot assure, that we will add new Web merchants
      in 2004, most of whom will be signed up through the efforts of our resellers.
      We
      currently have three such resellers who are existing Web merchants, authorized
      agents and a shopping cart software company who are paid a commission of
      approximately 20% of the revenue generated from new Web merchants referred
      by
      them. Our resellers take a three day training course from us, either online
      or
      at our corporate offices, before commencing to market our 900 billing services
      to Web merchants. Our agreements with resellers provide for the 20% commission,
      a nominal residual fee so long as we retain Web merchants referred by the
      reseller and are cancelable by either party on 30 days notice to the
      other.





Commencing
      with the launch of the 1.1 version telephone billing option, and assuming
      financing is available, we intend to initiate an online advertising campaign,
      using mass e-mails to advise online users of our billing service. We also intend
      to commence at that time an effort to attract resellers through attendance
      at
      industry and trade shows and through advertising in trade journals. We are
      uncertain as to how many resellers we will be able to attract through these
      efforts.





We
      also
      seek to enter into agreements with other online entities, web sites and
      independent sales and marketing organizations to generate market awareness
      and
      usage of our eTELCHARGE icon. We will also continue to promote our brand through
      the issuance of press releases to related trade publications, general interest
      media publications, print media and Internet media.





Over
      the
      next two years, we intend to make adjustments and improvements in our product
      software and marketing efforts. In order to identify the areas that need
      improvement, we anticipate meeting with online retailers who accepted our
      initial version and online shoppers to conduct online consumer interviews.
      In
      the near term, we will expand our efforts to reach online retailers, focusing
      upon the larger national retailers.  Upon the launch of the 1.1 version,
      assuming funds are available, we will also demonstrate our billing system at
      industry affiliated trade shows.





The
      initiation of our plan of operation is dependent upon our raising sufficient
      working capital to allow us to institute the plan. However, there can be no
      assurance that we will be successful in doing so. Due to our lack of capital
      and
      our need for working capital to continue our business plan, our auditors issued
      a going concern qualification as part of their audit opinion of our financial
      statements for the year ended December 31, 2003. We have not generated any
      revenue since our inception and since inception through the year ended December
      31, 2003 we incurred a cumulative net loss of $9,424,891 to date including
      a net
      loss of $2,271,341 for the year ended December 31, 2003.




Our
      operations have been funded solely through the issuance of our common shares.
      Total cash proceeds for the issuance of common shares totaled $1,113,247 from
      inception through December 31, 2004. In order to institute our business plans
      we
      must continue to raise capital, as revenue from operations will be insufficient
      in the short run to meet our working capital needs. However, we cannot assure
      that any such capital will be available to us. Based upon our current cash
      resources, we cannot meet our cash requirements or institute our business plan
      for more than six months unless we raise additional funds from the sale of
      our
      securities, as we have done in the past, or unless our revenue grows
      significantly.


-8-


**Item
      8. Changes in and Disagreements with Accountants on Accounting and Financial
      Disclosure.**





There
      were no reportable events of the type described in Item 304(a)(1)(iv) of
      Regulation S-B.




**Item
      8A.**  **Controls
      and Procedures.**





As
      required by Rule 13a-15 under the Securities Exchange Act of 1934 (the
“Exchange Act”), we carried out an evaluation of the effectiveness of the design
      and operation of our disclosure controls and procedures as of December 31,
      2003. This evaluation was carried out under the supervision and with the
      participation of our Chief Executive. Based upon that evaluation, our Chief
      Executive and Financial Officer concluded that our disclosure controls and
      procedures are not effective in timely alerting management to material
      information relating to us required to be included in our periodic SEC filings.
      Because our reports have not been prepared or submitted on a timely basis we
      were unable to properly accrue unpaid compensation expenses or properly
      calculate and record the value of stock issued for services. There have been
      no
      significant changes in our internal controls or in other factors that could
      significantly affect internal controls subsequent to the date we carried out
      our
      evaluation.




-9-


**PART
      III.**




**Item
      9. Directors, Executive Officers, Promoters and Control Persons; Compliance
      with
      Section 16(a) of the Exchange Act.**





The
      following table sets forth information regarding our executive officers and
      directors:





Name
            Age
            OfficeCarl
                O. Sherman
            39
            Chief
                Executive OfficerMichelle
                R. Sherman
            35
            Secretary
                and DirectorThomas
                Jackson
            34
            Director




Directors
      hold office for a period of one year from their election at the annual meeting
      of stockholders and until their successors are duly elected and qualified.
      Officers are elected by, and serve at the discretion of, the Board of Directors.
      None of the above individuals has any family relationship with any other except
      Carl O. Sherman is married to Michelle R. Sherman. Directors do not receive
      payment for attending Board meetings, but are reimbursed for out-of-pocket
      expenses. Each member receives 10,000 shares for each year served.





The
      following is a summary of the business experience of each of our executive
      officers and directors for at least the last five years:





CARL
      O.
      SHERMAN co-founded our company and has served as Chief Executive Officer and
      a
      director since our inception in June 1999. Mr. Sherman has also been the Chief
      Executive Officer of Consumer Data Solutions Corp., a Dallas, Texas-based
      company engaged in consumer services, since 1993. He devotes 90% of his time
      to
      our affairs and 10% of his time to the affairs of CDS. Mr. Sherman was a Senior
      National Account Executive for Sprint Corporation from 1988 to 1993. He is
      married to Michelle R. Sherman.





MICHELLE
      R. SHERMAN co-founded our company and has served as Secretary and a director
      since our inception in June 1999. Ms. Sherman has also been employed by Consumer
      Data Solutions Corp. as Operations Director and an account executive since
      July
      1996. From 1993 to 1996 she was a project supervisor and customer service
      representative for ATC, Inc./AT&T Universal Card Project. Ms. Sherman is
      married to Carl O. Sherman our CEO.





THOMAS
      JACKSON was appointed to our Board in September 2003 to fill a vacancy on the
      Board and is currently self employed in private practice as a Family
      Psychologist and has been working in behavioral health for nine years. He also
      has twelve years of experience in the technology industry and has been employed
      as a Network Infrastructure Design Engineer with @Track Communications. Mr.
      Jackson's background includes positions titles as Technology Researcher,
      Computer Programmer, Technical Sales, and Project Management for Technology
      projects. Mr. Jackson also served as a Technology Professor for DeVry Institute
      from 1994 to 1999. Mr. Jackson graduated with a Bachelor of Computer Science
      Degree from DeVry Institute in 1994, Masters of Telecommunication Management
      Degree from Keller Graduate School of Manangement in 2003 and a Doctorate in
      Theology from Catella University in 2003.





The
      company does not have an audit committee financial expert serving on its audit
      committee. The company is still in development stage and does not yet require
      the services of an audit committee financial expert.





-10-


Compliance
      with Section 16(a) of the Exchange Act




None
      of
      the persons that were a director, officer, beneficial owner of more than ten
      percent of any class of equity securities of the registrant registered pursuant
      to section 12, have filed Forms 3,4 or 5 in a timely manner during fiscal year
      2003. The Company intends to file the required forms in the very near future
      as
      part of an effort to fully comply with all filing requirements pursuant to
      the
      Securities Exchange Act of 1934 as amended.





No
      change
      requiring the filing of a Form 4 occurred in fiscal year 2003.





The
      Company has not adopted a code of ethics that applies to the principal executive
      officer, principal financial officer, principal accounting officer or persons
      performing similar functions. Until recently we had less than 3 employees and
      have not had sufficient capital to complete compliance. We intend to complete
      a
      code of ethics and file it as an exhibit to our 2005 10KSB which we intend
      to
      file with the Commission within the next 60-90 days.




**Item
      10. Executive Compensation.**





SUMMARY
      COMPENSATION TABLE





**LONG
                TERM COMPENSATION****ANNUAL
                COMPENSATION**
            **AWARDS**
            **PAYOUTS****(a)**
            **(b)**
            **(c)**
            **(d)**
            **(e)**
            **(f)**
            **(g)**
            **(h)**
            **(i)****NAME**
            
            
            
            
            
            **SECURITIES****AND**
            
            
            
            **OTHER**
            **RESTRICTED**
            **UNDERLYING**
            
            **ALL****PRINCIPAL**
            
            
            
            **ANNUAL**
            **STOCK**
            **OPTIONS/**
            **LTIP**
            **OTHER****POSITION**
            **YEAR**
            **SALARY($)**
            **BONUS($)**
            **COMPENSATION($)**
            **(AWARD(S)**
            **SARS(#)**
            **PAYOUTS($)**
            **COMPENSATION($)**Carl
                O. ShermanChief
                ExecutiveOfficer
            2003
            32,944
            -0-
            -0-
            2,340,000
                shares (1)
            -0-
            -0-
            -0-2002
            36,426
            -0-
            -0-
            40,000
                shares (2)
            -0-
            -0-
            -0-2001
            57,000
            -0-
            -0-
            -0-
            -0-
            -0-
            -0-




(1)
            Valued
                at $50,000.


(2)
            Valued
                at $60,000.




None of our executive officers or directors has been granted stock options,
      warrants or similar securities.





-11-


**Item
      11. Security Ownership of Certain Beneficial Owners and Management and Related
      Stockholder**




The
      following table sets forth the number of shares of each class of stock
      beneficially owned as of February 24, 2006 by each person known by eTelcharge
      to
      be the beneficial owner of more than five percent of any class of our voting
      securities. Except as noted below, to our knowledge, each stockholder listed
      below has sole voting and investment power with respect to all shares of stock
      shown beneficially owned by the stockholder.




**Name
                and Address of**
              **Beneficial
                Owner (1)**
            **Title
                of Class**
            **Amount
                and**
              **Nature
                of**
              **Beneficial
                Owner**
            **Percentage**
              **of
                Class**
            
            **Percentage
                of**
              **Common**
              **Voting
                Power**Carl
                O. Sherman(2)
            Voting
                Common Stock
            44,262,916
            34.5
            %
            34.5
            %Michelle
                R. Sherman(2)
            Voting
                Common Stock
            44,262,916
            34.5
            %
            34.5
            %Thomas
                Jackson
            Voting
                Common Stock
            126,212
            
            *
            
            *All
                officers and Directors
              as
                a group (3)
            
            44,389,128
            34.5
            %
            34.5
            %




*
      Less
      than 1%





(1)
      Unless otherwise stated the address for all beneficial owners listed is 1636
      N.
      Hampton Road, Suite 270, DeSoto, Texas 75115.


(2)
      Carl
      O. Sherman and Michelle R. Sherman are husband and wife and each share in the
      beneficial ownership of all 44,262,916 shares.





**Item
      12. Certain Relationships and Related Transactions.**





During
      November 2001, Carl O. Sherman, our Chief Executive Officer, advancedthe Company
      $38,000 in exchange for a note payable. The note payable is uncollateralized,
      requires monthly interest payments at 12.25% and does not have a specific
      maturity date.





In November 1999, we entered into a license agreement with Consumer Data
      Solutions Corp. under which CDS granted us an exclusive license to use its
      900
      number telephone billing software and assigned us its 900 telephone billing
      agreement with AT&T, in exchange for a cash payment of $116,500 and a
      royalty equal to 3% of our net income during the license period which we are
      obligated to pay to CDS. The license expires November 2098. Carl O. Sherman,
      our
      Chief Executive Officer and a director, is the controlling stockholder, Chief
      Executive Officer and a director of CDS. We believe that the terms of the
      license agreement with CDS are fair, reasonable and consistent with terms we
      could negotiate with unaffiliated third parties. In the future, any transactions
      with affiliated companies will be approved by a majority of the independent
      members of our board of directors.





During
      fiscal year 2003 there were no transactions between our company and any
      officers, directors or other affiliates. Carl O. Sherman who is our CEO and
      Michelle R. Sherman our CFO are husband and wife.





-12-


**Item
      13. Exhibits.**





31.1
            
            Certification
                of our Chief Executive Officer and Principal Executive Officer, under
                Section 302 of the Sarbanes-Oxley Act of 2002.31.2
            
            Certification
                of our Secretary and Principal Accounting and Financial Officer,
                under
                Section 302 of the Sarbanes-Oxley Act of 2002.32.1
            
            Certification
                of our Chief Executive Officer and Principal Executive Officer, under
                Section 906 of the Sarbanes-Oxley Act of 2002.32.2
            
            Certification
                of our Secretary and Principal Accounting and Financial Officer,
                under
                Section 906 of the Sarbanes-Oxley Act of
                2002.





**Item
      14. Principal Accountant Fees and Services.**





Audit
      Fees





The
      aggregate fees billed by our independent auditors, Malone & Bailey PC, for
      professional services rendered for the audit of our annual financial statements
      on Form 10-KSB for the year ended December 31, 2003 amounted to
      $6,750.





All
      Other
      Fees





No
      fees
      were billed by our auditors for products and services other than those described
      above under "Audit Fees" for the years ended December 31, 2003.





Board
      of
      Directors Pre-Approval Policies and Procedures





In
      October 2005, the Board of Directors adopted polices and procedures for
      pre-approving all audit and non-audit services provided by our independent
      auditors prior to the engagement of the independent auditors with respect to
      such services. Under the policy, our independent auditors are prohibited from
      performing certain non-audit services and are pre-approved to perform certain
      other non-audit and tax related services provided that the aggregate fees for
      such pre-approved non-audit and tax related services do not exceed a pre-set
      minimum. All audit services, audit-related services, tax services and other
      services provided by Malone & Bailey PC have been pre-approved by the Board
      of Directors.





-13-


**SIGNATURES**




In
      accordance with Section 13 or 15(d) of the Exchange Act, the registrant has
      caused this report to be signed on its behalf by the undersigned, thereunto
      duly
      authorized, on the 24th day of February 2006.




ETELCHARGE.COM,
              INC.By:
            /s/ Carl
              O.
              ShermanCarl
              O. ShermanChief
              Executive Officer


In
      accordance with the Exchange Act, this report has been signed by the following
      persons on behalf of the registrant and in the capacities indicated, on the
      24th
      day of February 2006.




**Signature**
            **Capacity**/s/
                Carl O. Sherman
            Chief
                Executive OfficerCarl
                O. Sherman
            (Principal
                Executive Officer)/s/
                Michelle R. Sherman
            Director
                and SecretaryMichelle
                R. Sherman
            (Principal
                Financial Officer)/s/
                Thomas Jackson
            DirectorThomas
                Jackson




-14-





INDEX
      TO FINANCIAL STATEMENTS














PAGEREPORT
                OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
            F-2FINANCIAL
                STATEMENTSBalance Sheets
            F-3Statements of Expenses
            F-4Statement of Changes in Shareholders' Equity (Deficit)
            F-5Statements of Cash Flows
            F-7Notes to Financial Statements
            F-8



































F-1





























REPORT
      OF
      INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To
      the
      Board of Directors


eTelcharge.com,
      Inc.


(A
      Development Stage Company)


Desoto,
      Texas





We
      have
      audited the accompanying balance sheet of eTelcharge.com, Inc. (A Development
      Stage Company) as of December 31, 2003, and the related statements of expenses,
      stockholders' deficit, and cash flows for the year then ended.   The
      financial statements for the period June 7, 1999 (inception) through December
      31, 2002, were audited by other auditors whose reports expressed unqualified
      opinions on those statements.  Our opinion on the statements of expenses,
      stockholders' deficit, and cash flows for the period June 7, 1999 (inception)
      through December 31, 2004, insofar as it relates to amounts for prior periods
      through December 31, 2002, is based solely on the reports of other
      auditors.  These financial statements are the responsibility of
      eTelcharge.com, Inc.'s management.  Our responsibility is to express an
      opinion on these financial statements based on our audits.





We
      conducted our audits in accordance with standards of the Public Company
      Accounting Oversight Board (United States).  Those standards require that
      we plan and perform the audits to obtain reasonable assurance about whether
      the
      financial statements are free of material misstatement.  An audit includes
      examining, on a test basis, evidence supporting the amounts and disclosures
      in
      the financial statements.  An audit also includes assessing the accounting
      principles used and significant estimates made by management, as well as
      evaluating the overall financial statement presentation.  We believe that
      our audits provide a reasonable basis for our opinion.





In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the financial position of eTelcharge.com, Inc.'s, as of
      December 31, 2004 and 2003, and the results of its operations and its cash
      flows
      for the periods described, in conformity with accounting principles generally
      accepted in the United States of America.





The
      accompanying financial statements have been prepared assuming that
      eTelcharge.com, Inc. will continue as a going concern.  As discussed in
      Note 3 to the financial statements, eTelcharge.com, Inc. suffered recurring
      losses and has a working capital deficit which raises substantial doubt about
      its ability to continue as a going concern.  Management's plans regarding
      those matters also are described in Note 3.  The financial statements do
      not include any adjustments that might result from the outcome of this
      uncertainty.








Malone
      & Bailey, PC


www.malone-bailey.com


Houston,
      Texas





October
      14, 2005


F-2


























**eTelcharge.COM,
                INC.****(A
                Development Stage Company)****BALANCE
                SHEET**





**December
                31,****2003****ASSETS**Current
                assets:Cash
            
            
            
            
            $
            276Fixed
                assets, net of accumulated depreciation of $39,224
            
            11,320Deposits
            
            
            
            
            
            1,000Total
                assets
            
            
            
            
            $
            12,596**LIABILITIES
                AND STOCKHOLDERS' DEFICIT**Current
                liabilities:Accrued
                expenses
            
            
            
            
            $
            2,021,033Payroll
                tax obligation
            
            
            
            
            
            118,196Accounts
                payable
            
            
            
            
            
            109,475Note
                payable to shareholder
            
            
            
            
            
            43,405Pending
                stock subscriptions
            
            
            
            
            
            84,500Total
                current liabilities
            
            
            
            
            
            2,376,609Commitments
            
            -Stockholders'
                deficit:Common
                stock, $.003 par value, 250,000,000 shares authorized,66,519,688
                shares issued and outstanding
            
            
            
            
            
            199,559Additional
                paid in capital
            
            
            
            
            
            6,861,319Deficit
                accumulated during the development stage
            
            
            
            
            
            (9,424,891
            )Total
                stockholders' deficit
            
            
            
            
            
            (2,364,013
            )Total
                liabilities and stockholders' deficit
            
            
            
            
            $
            12,596














F-3





**eTelcharge.COM,
                INC.****(A
                Development Stage Company)****STATEMENTS
                OF EXPENSES**








**June
                7, 1999****Year
                ended**
            
            **Year
                ended**
            
            **(Inception)
                to****December
                31,**
            
            **December
                31,**
            
            **December
                31,****2003**
            
            **2002**
            
            **2003****Restated**Operating
                expenses
            
            $
            2,264,108
            
            $
            1,235,393
            
            $
            9,418,258Net
                loss from operations
            
            
            (2,264,108
            )
            
            (1,235,393
            )
            
            (9,418,258
            )Other
                income
            
            
            9,871
            
            
            8,648
            
            
            20,773Interest
                expense
            
            
            (17,104
            )
            
            (3,874
            )
            
            (27,406
            )Net
                loss
            
            $
            (2,271,341
            )
            $
            (1,230,619
            )
            $
            (9,424,891
            )Basic
                and diluted net loss per share
            
            $
            (0.04
            )
            $
            (0.03
            )Weighted
                average shares outstanding
            
            
            61,810,435
            
            
            47,073,840











F-4








**eTelcharge.COM,
                INC.****(A
                Development Stage Company)****STATEMENT
                OF CHANGES IN STOCKHOLDERS' DEFICIT****Period
                from June 7, 1999 (Inception) through December 31,
                2003**








**Price
                per share**
            
            **Number
                of Common Shares Issued**
            
            **Par**
            
            **Additional
                Paid-in Capital**
            
            **Accumulated
                Deficit**
            
            **Total**Issuance
                of founder shares
            
            $
            0.00
            
            
            30,851,880
            
            $
            92,556
            
            $
            (69,417
            )
            $
            -
            
            $
            23,139Deemed
                distribution related to purchaseof
                asset from affiliate in 1999
            
            
            -
            
            
            -
            
            
            -
            
            
            (53,500
            )
            
            -
            
            
            (53,500
            )Issuance
                of common stock for propertyand
                equipment in 2001
            
            
            0.38
            
            
            12,800
            
            
            38
            
            
            4,762
            
            
            -
            
            
            4,800Issuance
                of common stock for cash:November
                27, 1999
            
            
            0.01
            
            
            1,600,000
            
            
            4,800
            
            
            5,200
            
            
            -
            
            
            10,000December
                10, 1999
            
            
            0.06
            
            
            160,000
            
            
            480
            
            
            9,520
            
            
            -
            
            
            10,000December
                17, 1999
            
            
            0.01
            
            
            2,400,000
            
            
            7,200
            
            
            22,800
            
            
            -
            
            
            30,000January
                14, 2000
            
            
            0.04
            
            
            146,668
            
            
            440
            
            
            5,060
            
            
            -
            
            
            5,500January
                28, 2000
            
            
            0.12
            
            
            80,000
            
            
            240
            
            
            9,730
            
            
            -
            
            
            9,970February
                7, 2000
            
            
            0.01
            
            
            960,000
            
            
            2,880
            
            
            9,120
            
            
            -
            
            
            12,000March
                14, 2000
            
            
            0.06
            
            
            40,000
            
            
            120
            
            
            2,380
            
            
            -
            
            
            2,500April
                13, 2000
            
            
            0.04
            
            
            1,472,000
            
            
            4,416
            
            
            59,584
            
            
            -
            
            
            64,000June
                30, 2000
            
            
            0.38
            
            
            780,000
            
            
            2,340
            
            
            290,160
            
            
            -
            
            
            292,500September
                30, 2000
            
            
            0.38
            
            
            300,000
            
            
            900
            
            
            111,600
            
            
            -
            
            
            112,500December
                31, 2000
            
            
            0.38
            
            
            20,000
            
            
            60
            
            
            7,440
            
            
            -
            
            
            7,500February
                1, 2001
            
            
            0.13
            
            
            192,000
            
            
            576
            
            
            23,424
            
            
            -
            
            
            24,000March
                14, 2001
            
            
            0.38
            
            
            60,000
            
            
            180
            
            
            22,320
            
            
            -
            
            
            22,500April
                1, 2001
            
            
            0.38
            
            
            39,336
            
            
            118
            
            
            14,634
            
            
            -
            
            
            14,752April
                24, 2001
            
            
            0.38
            
            
            40,000
            
            
            120
            
            
            14,880
            
            
            -
            
            
            15,000May
                20, 2001
            
            
            0.37
            
            
            42,668
            
            
            128
            
            
            15,872
            
            
            -
            
            
            16,000May
                25, 2001
            
            
            0.38
            
            
            40,000
            
            
            120
            
            
            14,880
            
            
            -
            
            
            15,000June
                11, 2001
            
            
            0.38
            
            
            120,000
            
            
            360
            
            
            44,640
            
            
            -
            
            
            45,000June
                18, 2001
            
            
            0.38
            
            
            80,000
            
            
            240
            
            
            29,760
            
            
            -
            
            
            30,000August
                31, 2001
            
            
            0.38
            
            
            40,000
            
            
            120
            
            
            14,880
            
            
            -
            
            
            15,000September
                20, 2001
            
            
            0.38
            
            
            80,000
            
            
            240
            
            
            29,760
            
            
            -
            
            
            30,000September
                21, 2001
            
            
            0.50
            
            
            20,000
            
            
            60
            
            
            9,940
            
            
            -
            
            
            10,000November
                21, 2001
            
            
            0.34
            
            
            59,140
            
            
            177
            
            
            19,848
            
            
            -
            
            
            20,025December
                3, 2001
            
            
            0.38
            
            
            13,332
            
            
            40
            
            
            4,960
            
            
            -
            
            
            5,000January
                30, 2002
            
            
            0.38
            
            
            16,000
            
            
            48
            
            
            5,952
            
            
            -
            
            
            6,000February
                1, 2002
            
            
            0.30
            
            
            66,664
            
            
            200
            
            
            19,801
            
            
            -
            
            
            20,001February
                26, 2002
            
            
            0.31
            
            
            8,796
            
            
            26
            
            
            2,679
            
            
            -
            
            
            2,705April
                1, 2002
            
            
            0.13
            
            
            80,000
            
            
            240
            
            
            9,760
            
            
            -
            
            
            10,000April
                9, 2002
            
            
            0.38
            
            
            21,832
            
            
            65
            
            
            8,257
            
            
            -
            
            
            8,322July
                1, 2002
            
            
            0.21
            
            
            119,200
            
            
            358
            
            
            24,342
            
            
            -
            
            
            24,700July
                10, 2002
            
            
            0.37
            
            
            107,732
            
            
            323
            
            
            40,075
            
            
            -
            
            
            40,398August
                16, 2002
            
            
            0.21
            
            
            3,764
            
            
            11
            
            
            789
            
            
            -
            
            
            800September
                5, 2002
            
            
            0.88
            
            
            4,000
            
            
            12
            
            
            3,488
            
            
            -
            
            
            3,500September
                10, 2002
            
            
            0.38
            
            
            13,332
            
            
            40
            
            
            4,960
            
            
            -
            
            
            5,000September
                20, 2002
            
            
            0.37
            
            
            53,336
            
            
            160
            
            
            19,840
            
            
            -
            
            
            20,000September
                30, 2002
            
            
            0.38
            
            
            21,332
            
            
            64
            
            
            7,936
            
            
            -
            
            
            8,000December
                20, 2002
            
            
            0.37
            
            
            114,432
            
            
            343
            
            
            41,956
            
            
            -
            
            
            42,299Issuance
                of common stock for services:December
                10, 2000
            
            
            0.38
            
            
            84,200
            
            
            253
            
            
            31,322
            
            
            -
            
            
            31,575









F-5








December
                10, 2000
            
            
            0.38
            
            
            1,400,000
            
            
            4,200
            
            
            520,800
            
            
            -
            
            
            525,000February
                14, 2001
            
            
            0.13
            
            
            1,221,520
            
            
            3,665
            
            
            149,048
            
            
            -
            
            
            152,713February
                22, 2001
            
            
            0.13
            
            
            600,000
            
            
            1,800
            
            
            73,200
            
            
            -
            
            
            75,000June
                6, 2001
            
            
            0.38
            
            
            100,000
            
            
            300
            
            
            37,200
            
            
            -
            
            
            37,500June
                12, 2001
            
            
            0.38
            
            
            20,000
            
            
            60
            
            
            7,440
            
            
            -
            
            
            7,500August
                31, 2001
            
            
            0.38
            
            
            1,400,000
            
            
            4,200
            
            
            520,800
            
            
            -
            
            
            525,000September
                10, 2001
            
            
            0.25
            
            
            300,000
            
            
            900
            
            
            73,413
            
            
            -
            
            
            74,313September
                11, 2001
            
            
            0.38
            
            
            160,000
            
            
            480
            
            
            59,520
            
            
            -
            
            
            60,000September
                12, 2001
            
            
            0.38
            
            
            9,200,000
            
            
            27,600
            
            
            3,422,400
            
            
            -
            
            
            3,450,000January
                7, 2002
            
            
            0.38
            
            
            1,573,400
            
            
            4,720
            
            
            592,805
            
            
            -
            
            
            597,525January
                30, 2002
            
            
            0.38
            
            
            20,000
            
            
            60
            
            
            7,440
            
            
            -
            
            
            7,500April
                1, 2002
            
            
            0.38
            
            
            33,000
            
            
            99
            
            
            12,276
            
            
            -
            
            
            12,375May
                29, 2002
            
            
            0.38
            
            
            120,000
            
            
            360
            
            
            44,640
            
            
            -
            
            
            45,000September
                30, 2002
            
            
            0.38
            
            
            40,000
            
            
            120
            
            
            14,880
            
            
            -
            
            
            15,000December
                31, 2002
            
            
            0.38
            
            
            338,400
            
            
            1,015
            
            
            125,885
            
            
            -
            
            
            126,900Share
                adjustment
            
            
            -
            
            
            275,060
            
            
            825
            
            
            (634
            )
            
            -
            
            
            191Cancellation
                of common stock
            
            
            -
            
            
            (120,000
            )
            
            (360
            )
            
            360
            
            
            -
            
            
            -Net
                loss
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (7,153,550
            )
            
            (7,153,550
            )Balances,
                December 31, 2002 (Restated)
            
            
            
            
            
            57,045,824
            
            
            171,137
            
            
            6,556,866
            
            
            (7,153,550
            )
            
            (425,547
            )Issuance
                of common stock for services
            
            
            0.03
            
            
            9,200,800
            
            
            27,602
            
            
            202,498
            
            
            -
            
            
            230,100Issuance
                of common stock for cash
            
            
            0.38
            
            
            273,064
            
            
            819
            
            
            101,956
            
            
            
            
            
            102,775Net
                loss
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (2,271,341
            )
            
            (2,271,341
            )Balances,
                December 31, 2003
            
            
            
            
            
            66,519,688
            
            
            199,559
            
            
            6,861,319
            
            
            (9,424,891
            )
            
            (2,364,013
            )











F-6




**eTelcharge.COM,
                INC.****(A
                Development Stage Company)****STATEMENTS
                OF CASH FLOWS**








**June
                7, 1999****Year
                ended**
            
            **Year
                ended**
            
            **(Inception)
                to****December
                31,**
            
            **December
                31,**
            
            **December
                31,****2003**
            
            **2002**
            
            **2003****Restated**CASH
                FLOWS FROM OPERATING ACTIVITIES:Net
                loss
            
            $
            (2,271,341
            )
            $
            (1,230,619
            )
            $
            (9,424,891
            )Adjustments
                to reconcile net loss to netcash
                used in operating activities:Amortization
                and depreciation
            
            
            9,677
            
            
            31,686
            
            
            102,224Issuance
                of common stock for services
            
            
            230,100
            
            
            804,300
            
            
            5,996,331Changes
                in:Employee
                advances
            
            
            472
            
            
            718
            
            
            -Other
                assets
            
            
            -
            
            
            -
            
            
            (1,000
            )Accounts
                payable
            
            
            22
            
            
            55,605
            
            
            109,476Accrued
                compensation
            
            
            1,833,216
            
            
            101,151
            
            
            2,021,033Payroll
                tax obligation
            
            
            22,152
            
            
            36,518
            
            
            118,196Net
                cash used in operating activities
            
            
            (175,702
            )
            
            (200,641
            )
            
            (1,078,631
            )CASH
                FLOWS FROM INVESTING ACTIVITIESPurchase
                of property and equipment
            
            
            (4,791
            )
            
            (628
            )
            
            (45,744
            )Net
                cash used in investing activities
            
            
            (4,791
            )
            
            (628
            )
            
            (45,744
            )CASH
                FLOWS FROM FINANCING ACTIVITIES:Decrease
                in bank overdraft
            
            
            -
            
            
            (3,566
            )
            
            -Proceeds
                from sales of common stock
            
            
            102,775
            
            
            191,725
            
            
            1,113,247Net
                loan proceeds from shareholder
            
            
            13,294
            
            
            (6,890
            )
            
            43,404Payment
                on payable to related party for asset purchase
            
            
            -
            
            
            -
            
            
            (116,500
            )Cash
                received on pending stock subscriptions
            
            
            64,500
            
            
            20,000
            
            
            84,500Net
                cash provided by financing activities
            
            
            180,569
            
            
            201,269
            
            
            1,124,651NET
                INCREASE IN CASH AND CASH EQUIVALENTS
            
            
            76
            
            
            -
            
            
            276CASH
                AND CASH EQUIVALENTS, beginning of period
            
            
            200
            
            
            200
            
            
            -CASH
                AND CASH EQUIVALENTS, end of period
            
            $
            276
            
            $
            200
            
            $
            276Supplemental
                schedule of non-cash financing activities:Issuance
                of common stock in exchange forreceivable
                from shareholder
            
            $
            -
            
            $
            -
            
            $
            1,000Issuance
                of payable to related party in exchangefor
                proprietary rights
            
            
            
            
            
            
            
            
            116,500Property
                and equipment acquired throughissuance
                of common stock
            
            
            
            
            
            
            
            
            4,800Supplemental
                cash flow disclosures:Cash
                paid for income taxes
            
            
            -
            
            
            -
            
            
            -Cash
                paid for interest
            
            
            1,669
            
            
            3,874
            
            
            5,543




F-7











**eTelcharge.COM,
      INC.**


**(A
      Development Stage Company)**


**NOTES
      TO FINANCIAL STATEMENTS**










**NOTE
      1 - HISTORY AND ORGANIZATION**







eTelcharge.com,
      Inc. (“eTelcharge”) was incorporated in Nevada on June 7, 1999. eTelcharge was
      formed for the purpose of providing an Internet credit option for online
      shoppers to charge items sold over the Internet to their telephone bill. As
      of
      December 31, 2003, eTelcharge has not commenced significant operations.
      eTelcharge is in the process of raising equity financing to fund future
      operations and marketing of its product to target customers. As such, eTelcharge
      is considered to be in the development stage.




NOTE
      2 -
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES







**Use
      of Estimates and Assumptions**





Management
      uses estimates and assumptions in preparing financial statements in accordance
      with generally accepted accounting principles. Those estimates and assumptions
      affect the reported amounts of assets and liabilities, the disclosure of
      contingent assets and liabilities, and the reported amounts of revenues and
      expenses. Actual results could vary from the estimates that were
      used.





*Restatements* of 2002
      were made.  See note 13 for details.




**Cash
      and Cash Equivalents**




eTelcharge
      considers cash in banks, certificates of deposit and other highly liquid
      investments with maturities of three months or less when purchased to be cash
      and cash equivalents.




***Property
      and Equipment***





Property
      and equipment are recorded at cost. Depreciation is computed using the
      straight-line method over estimated lives of three to five years. 
Expenditures that increase values or extend useful lives are capitalized.
      Routine maintenance and repairs are charged to expense when
      incurred.





**Impairment
      of Long-Lived Assets**





eTelcharge
      reviews the carrying value of its long-lived assets annually or whenever events
      or changes in circumstances indicate that the historical cost-carrying value
      of
      an asset may no longer be appropriate.  eTelcharge assesses recoverability
      of the carrying value of the asset by estimating the future net cash flows
      expected to result from the asset, including eventual disposition.  If the
      future net cash flows are less than the carrying value of the asset, an
      impairment loss is recorded equal to the difference between the asset's carrying
      value and fair value.  There was no impairment of long-lived assets for the
      years ending December 31, 2003 and 2002.





***Proprietary
      Rights***





Proprietary
      rights consist of certain exclusive rights that allow eTelcharge's customers
      to
      charge meals and other consumer oriented goods to proprietary "900" telephone
      numbers






F-8





obtained
      from AT&T. These rights expired in January 2003, and were fully amortized at
      December 31, 2002. The proprietary rights were being amortized using the
      straight-line method over their estimated useful life of three years which
      was
      the contractual life of the underlying agreement with AT&T.   See
      note 12 for details.







***Income
      Taxes***





eTelcharge
      accounts for income taxes in accordance with the asset and liability method.
      Deferred income tax assets and liabilities are computed periodically for
      differences between the financial statement and tax bases of assets and
      liabilities that will result in taxable or deductible amounts in the future
      based on enacted tax laws and rates applicable to the periods in which the
      differences are expected to affect taxable income. Valuation allowances are
      established when necessary to reduce deferred tax assets to the amount expected
      to be realized. Income tax expense is the tax payable or refundable for the
      period plus or minus the change during the period in deferred tax assets and
      liabilities.







***Revenue
      Recognition***





eTelcharge
      recognizes revenue in accordance with Staff Accounting Bulletin (SAB) No. 101,
      “Revenue Recognition in Financial Statements.” Non-refundable, one-time
      processing fee revenue from online merchants will be recognized using the
      straight-line method over the term of the online merchant agreement. Billing
      fee
      and service charge revenue from online merchants will be recognized as online
      purchases from customers are processed and will typically range from 5% to
      8% of
      the purchase price, plus $0.15 per transaction and will be non-refundable.
      Customer fee revenue will be recognized upon shipment by the online merchant
      to
      the customer and will typically be 10% of the purchase price and will be
      refundable should the merchant approve the customer dispute. All funds will
      be
      remitted directly to eTelcharge. eTelcharge expects to enter into 2 to 3 year
      agreements with merchants, with such agreements not containing cancellation
      clauses. The direct costs of providing these services includes a transaction
      charge by the carrier of approximately 6% of the purchase price and a usage
      charge per minute that will be expensed as incurred.








*Stock-Based
      Compensation*





eTelcharge
      issues stock as compensation to employees and outside consultants for services
      rendered.  These shares are recorded at the fair value of the stock as
      measured on the date or dates the services were rendered.





eTelcharge
      adopted the disclosure requirements of Financial Accounting Standard No. 123,
      Accounting for Stock-Based Compensation (FAS No. 123) and FAS No. 148 with
      respect to pro forma disclosure of compensation expense for options issued.
      For
      purposes of the pro forma disclosures, the fair value of each option grant
      is
      estimated on the grant date using the Black-Scholes option-pricing
      model.





eTelcharge
      applies APB No. 25 in accounting for its employee stock option plans and,
      accordingly, no compensation cost has been recognized in eTelcharge's financial
      statements for stock options under any of the stock plans which on the date
      of
      grant the exercise price per share was equal to or exceeded the fair value
      per
      share. There were no options or warrants granted during the years ended December
      31, 2003 and 2002.







***Net
      Loss Per Share***





Basic
      and
      diluted loss per share is computed by dividing net loss by the weighted average
      number of basic and diluted common shares outstanding.  There were no
      dilutive securities for the years ended December 31, 2003 and 2002.







***Recent
      Accounting Pronouncements***





eTelcharge
      does not expect the adoption of recently issued accounting pronouncements to
      have a significant impact on eTelcharge's results of operations, financial
      position or cash flow.


F-9







**NOTE
      3 - GOING CONCERN**





As
      shown
      in the accompanying financial statements, eTelcharge incurred recurring net
      losses of $2,271,341 and $1,230,619 in fiscal 2003 and 2002, respectively,
      has
      an accumulated deficit of $9,424,891 and a working capital deficit of
      $2,376,333.  These conditions raise substantial doubt as to eTelcharge's
      ability to continue as a going concern.  Management is trying to raise
      additional capital through sales of common stock.  The financial statements
      do not include any adjustments that might be necessary if eTelcharge is unable
      to continue as a going concern.




**NOTE
      4 - PROPERTY AND EQUIPMENT**





Property
      and equipment consisted of the following at December 31, 2003 and
      2002:





****
            **Amounts
                on December 31,****Description**
            **Life**
            **2003**
            **2002**-------------------------------------
            ---------
            ----------
            -----------Computer equipment
            3
                years
            $
                33,399
            $ 
                30,836Office furniture and   equipment
            5
                years
            17,145
            14,917----------
            ----------50,544
            45,753Less: accumulated depreciation
            
            (39,224)
            (29,547)----------
            -----------$ 
                11,320
            $ 
                16,206======
            =======








Depreciation
      expense totaled $9,677 and $12,436 in fiscal 2003 and 2002,
      respectively.




**NOTE
      5 - ACCRUED COMPENSATION AND PENDING STOCK SUBSCRIPTIONS**







As
      of
      December 31, 2003, eTelcharge was obligated to issue 613,333 shares of common
      stock valued at $187,817 to several employees and consultants for accrued
      compensation under various agreements.




As
      of
      December 31, 2003, eTelcharge was obligated to issue 25,448,333 shares of common
      stock for proceeds received of $1,829,217 from several investors under pending
      stock subscriptions.




**NOTE
      6 - PAYROLL TAX OBLIGATION**





eTelcharge
      has not remitted a portion of its Federal and State employer and employee
      payroll taxes for the years 2001 through 2003. eTelcharge has determined this
      obligation to be the actual amounts of the tax withheld from the employees
      and
      the employer portion of the Federal Tax obligation in addition to an estimated
      25% penalty and interest accrual. The total obligation associated with these
      delinquent amounts at December 31, 2003 and 2002 is $118,196 and $96,044,
      respectively.








F-10











**NOTE
      7 - NOTE PAYABLE TO SHAREHOLDER**





At
      December 31, 2003 and 2002, eTelcharge has an unsecured note payable to a
      shareholder in the amount of $43,404 and $30,110, respectively, with interest
      only payments due monthly at 12.25% with no specified maturity date.  The
      shareholder makes advances to eTelcharge on an as needed basis and is
      periodically repaid portions of the outstanding balance.




**NOTE
      8 - INCOME TAXES**





eTelcharge
      uses the liability method, where deferred tax assets and liabilities are
      determined based on the expected future tax consequences of temporary
      differences between the carrying amounts of assets and liabilities for financial
      and income tax reporting purposes. eTelcharge has incurred significant net
      losses in past years and, therefore, has no tax liability. The net deferred
      tax
      asset generated by the loss carry-forward has been fully reserved. The
      cumulative net operating loss carry-forward is approximately $1,250,000 and
      $960,000 at December 31, 2003 and 2002, respectively, and will expire in the
      years 2019 through 2023.





At
      December 31, 2003 and 2002, deferred tax assets consisted of the
      following:





**2003**
            **2002**Deferred tax assetsNet operating losses
            $ 
                424,000
            $
                  339,969Less: valuation allowance
            (424,000)
            (339,969)--------------
            --------------Net deferred tax asset
            $            
                -
            $             
                -========
            ========











**NOTE
      9 - COMMITMENTS**





eTelcharge
      has a business relationship (affinity program) with a charitable organization
      that requires eTelcharge to contribute $.05 per revenue generating transaction
      to the charity up to $250,000 per year.





eTelcharge
      has several agreements with employees and consultants that require eTelcharge
      to
      issue shares of common stock if the agreements are fulfilled by the employees
      and consultants.  eTelcharge will be required to issue up to 302,085 and
      156,665 shares of common stock in 2005 and 2006, respectively, under existing
      agreements.





eTelcharge
      is obligated to issue 10,000 shares of common stock to each director each year
      for director services provided to eTelcharge.  eTelcharge typically has
      four directors.





In
      August
      2000, eTelcharge entered into a lease for office space.  The lease was for
      three years with base rent of $1,000 per month and a security deposit of
      $1,000.  The lease was continued on a month-to-month basis until February
      2004 when the lease space was increased and renewed.  The renewal period
      expires in January 2007 with base rent of $3,675 per month and a security
      deposit of $1,000.





At
      December 31, 2003, future minimum commitments under non-cancelable operating
      leases are as follows:




2004
            $
                44,1002005
            44,1002006
            44,1002007
            3,675$135,975








Rent
      expense totaled approximately $12,000 each for the years ended December 31,
      2003
      and 2002.






F-11







**NOTE
      10- COMMON STOCK**







Effective
      April 5, 2005, eTelcharge effected a 4:1 forward split of eTelcharge's common
      stock.  All share and per share amounts reflect the effect of the split as
      if it had occurred on the first day of the first period presented.







Since
      inception, the following share activity occurred:







**Shares**
            **Amount**--------------
            --------------Shares for cash
            9,688,628
            $1,113,247Shares for services
            56,938,260
            5,996,331Shares for assets
            12,800
            4,800Share cancellation
            (120,000)
            ---------------
            --------------Totals
            66,519,688
            $7,114,378========
            ========




**NOTE
      11 - STOCK OPTIONS**







Under
      the
      terms of a stock option agreement effective August 1, 2001, eTelcharge granted
      options to a consulting firm to purchase 9,200,000 shares of common stock.
      6,000,000 options have an exercise price of $0.50 per share and 3,200,000
      options have an exercise price of $0.63 per share. The options vested
      immediately upon approval by the Securities and Exchange Commission (SEC) of
      eTelcharge's Form SB-2, which occurred in April of 2002.  The options
      expired in April 2003. eTelcharge estimated the fair value of this option grant
      using the Black-Scholes option-pricing model with the following
      assumptions.





Summary
      information regarding options is as follows:





**Wtd.
                Avg.******
            
            **Exercise******
            **Options**
            **Price**--------------
            --------------Outstanding at December 31, 2002
            9,200,000
            $0.54Expired
            (9,200,000)
            0.54--------------
            --------------Outstanding
                at December 31, 2003
            -
            -========
            ========




**NOTE
      12 - PAYABLE TO RELATED PARTY AND PROPRIETARY RIGHTS**





During
      1999, eTelcharge purchased proprietary rights from a related company, Consumer
      Data Solutions Corp. ("CDS"), which has the same majority shareholder as
      eTelcharge, for $116,500 payable under a repayment agreement which required
      monthly payments ranging from $7,500 to $8,500 through January 2001.  The
      repayment agreement was unsecured and does not bear interest. In addition,
      the
      agreement requires eTelcharge to pay CDS for a period of 99 years, 3% of any
      and
      all income, less customary and normal business expenses associated with the
      usage of proprietary rights (which equates to 3% of net income of eTelcharge)
      beginning January 1, 2001.





As
      these
      rights were purchased from a related entity, the asset was recorded by
      eTelcharge at the book value of CDS. Accordingly, the asset was recorded at
      $63,000 with the difference between the recorded cost and the payable to related
      party being reflected as a debit to additional paid-in capital. Amounts payable
      to CDS totaled $0 at December 31, 2003 and 2002.






F-12




**NOTE
      13 - RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS**







During
      2005, management of eTelcharge discovered errors related to 2001 and 2002. 
9,200,000 shares of common stock valued at $3,450,000 issued in 2001 for
      services were not recorded.  Accordingly, net loss, common stock and
      additional paid in capital were understated by $3,450,000, $27,600 and
      $3,422,400, respectively.  Accrued compensation and pending stock
      subscriptions of $104,651 and $9,279 related to 2002 were not recorded. 
Accordingly, net loss, accrued compensation and pending stock subscriptions
      were
      understated by $113,930, $104,651 and $9,279, respectively.







**NOTE
      14 - SUBSEQUENT EVENTS**





eTelcharge
      has issued 61,682,020 shares of common stock during 2005. Of this amount
      48,343,596 shares were issued for prior year services for a previously accrued
      total of $2,574,374. Shares totaling 4,130,424 were issued for $138,157 in
      cash,
      of which $132,007 was received in prior years and $6,150 was received in 2005.
      The president of eTelcharge received 9,200,000 common shares, valued at
      $1,840,000 for services in 2005, while an employee received 8,000 common shares,
      valued at $1,600 for services in 2005.